At the NERC Board of Trustees meeting this week in Vancouver, Canada, NERC outlined a new initiative intended to reduce the administrative burden on Registered Entities associated with the processing of Reliability Standard violations. The procedure, which has yet to be spelled out in detail, would adjust the administrative process based on the risk to bulk power system reliability presented By a given violation.
On July 19, 2011, following a lengthy consideration of the smart grid interoperability standards proposed By the National Institute of Standards and Technology (NIST), FERC terminated its consideration of the five “families” of proposed interoperability standards, concluding that there was a lack of consensus regarding the standards.
On July 11, 2011, President Barack Obama issued an Executive Order requesting independent regulatory agencies to produce plans to reassess and streamline their regulations. The July 11 Executive Order follows up on Executive Order 13563, issued on January 18, 2011, which directed executive agencies to produce a regulatory system that protects public health, welfare, safety, and the environment while promoting economic growth, innovation, competitiveness, and job creation. Executive Order 13563 set forth general requirements to executive agencies concerning public participation, integration and innovation, flexible approaches, and science.
On July 5, 2011, the Federal Energy Regulatory Commission (FERC) and the Department of Energy (DOE) issued their joint Implementation Proposal for the National Action Plan on Demand Response. The proposal complies with section 529 of the Energy Independent and Security Act of 2007 (EISA).
On June 30, 2011, NERC filed its remaining responses to FERC’s recent questions on the expected scope of bulk-power system facilities considered Critical Assets under the proposed CIP-002-4 Reliability Standard. The proposed standard would, for the first time, create bright-line criteria for identifying the facilities subject to NERC’s CIP-002 through CIP-009 Critical Infrastructure Protection Reliability Standards, moving away from the current criteria that grant a great deal of discretion to individual entities.
On June 16, 2010, the Federal Energy Regulatory Commission (Commission) issued a Notice of Inquiry in Docket Nos. RM11-24-000 and AD10-13-000 seeking comments on two separate but related issues.
On June 20, 2011, the U.S. Supreme Court issued its much-anticipated decision in American Electric Power Co. v. Connecticut, reviewing whether federal common law would support a claim that greenhouse gas emissions could give rise to a public nuisance claim that would warrant injunctive relief against future emissions. The Court concluded that the federal common law cannot support such a claim.
The plaintiffs, including eight states, New York City, and three nonprofit land trusts, brought suit in the Southern District of New York against five electric power companies alleged to be the largest emitters of carbon dioxide in the United States. The complaint alleged that carbon dioxide emissions contributed to global warming and thereBy constituted a nuisance under federal common law. The plaintiffs requested an injunction limiting emissions in the future. No monetary damages were sought. The district court dismissed the case, finding that the complaint presented a nonjusticiable political question. The Second Circuit reinstated the case, holding that the plaintiffs were not barred By the political-question doctrine and had stated a federal common law nuisance claim.
On June 15, 2011, NERC filed with FERC for approval of the revised Reliability Standard FAC-008-3 (Facility Ratings), which would replace the currently effective FAC-008-1 and FAC-009-1 Reliability Standards. The central revisions to the Standard include the following:
FERC has relied on Form 2 data to initiate proceedings under Section 5 of the Natural Gas Act (NGA) to change prospectively the transmission rates of natural gas companies. In the coming years, FERC may start taking a similar approach to electric transmission rates, relying on Form 1 data to initiate proceedings under Section 206 of the Federal Power Act (FPA) to change electric transmission rates.
Morgan Lewis Energy partners Mark R. Haskell and Stephen M. Spina, and associate Bryan L. Clark presented a one-hour webinar, which compared and contrasted FERC's authority under Section 5 of the NGA to its authority under Section 206 of the FPA and discussed the structure and framework of a FERC-initiated rate complaint.
On June 1, 2011, Morgan Lewis's Energy Practice is hosting an all-day seminar on reliability standards compliance. Discussions will include:
- Emerging NERC compliance issues
- Cyber security compliance issues and preparation for Version 4 standards
- Preparing for NERC Reliability Standards audits
- Impact of Compliance Application Notices on requests for interpretation
- Responding to NERC alerts
- Issues related to NERC event analyses
- Prospects for energy legislation